Stocks Fall 300 Points as Recession Worries Grow

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Jason January 22, 2008 2:10 pm (Pacific time)

The market loss would have met my forecast... if it weren't for those meddling kids... and their dog, too! But really, a record drop in the Fed Funds rates indicates to me two things: 1)a Fed that is now controlled by Wall Street; 2) a Fed and Wall Street that is scared. Let's see what this week brings. A 3.5% Fed Funds rate means that it does not have really an more cuts in its toolbox. It is already approaching a negative real rate, and I don't think the Fed is stupid enough to go into negative territory.

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Jefferson January 21, 2008 9:47 pm (Pacific time)

Jason I have no doubt the world stock market has a bit more correction to undergo. I remember quite well in past market hissy-fits that many brokers felt the sky was falling, hopefully it won't be this time either...

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Jason January 21, 2008 7:29 pm (Pacific time)

I will put money down on a further 4% down day tomorrow! Anyone want to take the action?

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Jefferson January 21, 2008 2:28 pm (Pacific time)

Neoconservatism (Neocon) is hard to pin down as discrete political theory; in any case, as a practical matter, it denotes the mentality of those who moved from somewhere on the political left to somewhere on the right, primarily during the late '70s. It had "two ruling passions": On the one hand, the neocons were repulsed by the countercultural '60s radicalism that came to dominate the American liberal establishment. On the other, they argued for a more assertive, muscular foreign policy (at the time in response to Soviet expansionism). ... The most popular political "slur" of our time is the term “neocon.” Politically engaged people of several ideologies use the term regularly and although they mean different things when they use it, the term is always intended to be an insult, like the terms “neo-Nazi,” and “fascist,” also favorite slurs of the same ilk using “neocon. In essence, the term “neocon” was fashioned after the term “neo-Nazi,” both intended to insult those of differing political belief systems from the far left's democratic socialism. Note: John Dean is considered by knowledgeable individuals as one not to expect any objectivity from, I guess that might be the reason the far left loons really like him and give glowing critiques on whatever he writes or says...a useful idiot for the moonbats.

Editor to Jefferson: I am approving this in its whole form but please understand that the name calling is what we are trying to get away from here and this one does make me uncomfortable. The point is not to restrict the ability of people to assess a public official, but I am being very hard and restrictive on my own staff right now and I am trying to improve the feeling of this for all of us. Your political analysis is welcome, please try to refrain from using insulting terms, thanks.

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Jefferson January 21, 2008 1:54 pm (Pacific time)

We are the number one economy and when we hurt, the other world markets get hit much harder. Some on the left attempt to talk up the European market, but they have a high unemployment rate coupled with an aging population, suffice, they and the Asian markets will take longer to recover, if neccessary. America has survived Bear markets before, and we will successfully deal with any future problems. Unfortunately those on the far left, e.g. , New York Times, Harry Reid, Pelosi, ad nauseum, are heavily invested in hoping we continue to have worsening difficulties, whether foreign or domestic, they simply want to create a fearful environment for their political agenda during this election cycle. I remain optimistic about the market, but what worries me is how easily people fall for the far left propaganda. The mainstream media is simply becoming less and less reliable in reporting accurately, especially the hopelessly corrupt New York Times, a publication that is by-lined around the world, and simply is incapable of even correcting malicious stories when they have been pointed out as wrong. Maybe some libel suits and/or some 24/7 marching around the homes of the owner and top editors will help them to start becoming the professional paper they once were?

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Jason January 21, 2008 12:30 pm (Pacific time)

Thanks, Glen. I just ordered the book from Amazon. I looked at wikipedia (http://en.wikipedia.org/wiki/Neoconservatism) and realize that the term, which I thought perjorative, may not be so. However, I don't fit that "mold" either. The site says, "The term 'Neoconservative' was originally used as a criticism against liberals that had politically 'moved to the right'." The use of the word appears to be used in this way, and not really as a compliment or matter-of-fact description of someone's political philosophy.

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Glen January 21, 2008 8:16 am (Pacific time)

Jason: I read John Dean's "Conservatives without a Conscience" which is a great book in understanding the conservative movement. Highly recommended. "Neocon" according to Dean, is a collection of contemporary conservatives with many different agendas. I won't try to summarize this book more than that. Dean distinguishes neocons from Goldwater conservatives, a category you might find yourself in. You'd be in good company. Hillary Clinton was once a Goldwater girl.

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Jason January 20, 2008 8:01 pm (Pacific time)

Jefferson, the Savings and Loan debacle at the end of the 1980s is similar to what is happening now. The government had to step in and bail out the S and Ls because they were insured. The appraisers got all the blame for that one (costing $500 billion in '''those''' dollars (which would be over a trillion today?) We went into a recession as a result, and it was Bush Sr who had to initally deal with the fallout. yeah, we recovered. And we will recover from anything. It's just a matter of how long before we keep spending what we don't have to support our national government. I, myself, believe that big national governments aren't going to ever "get fixed" and states need to determine how to spend what money they actually have. Does that make me a "neocon"? I am not sure that a neocon really means. I could not find a clear definition. Maybe someone could help?

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Jefferson January 20, 2008 6:12 pm (Pacific time)

Jason I have enjoyed your posts, thanks for sharing your valuable insight, I am impressed. Thank you also Vic. Since 2000 our economy has absorbed the Dot Com crash, the NASDAQ crash, the Enron/Arthur Andersen accounting scandal, 9/11, Katrina/Rita, the Housing crash, the sub-prime crash, $100/barrel oil, the California energy crisis, massive product dumping by China, and the costs of two major wars in Afghanistan and Iraq. This proven ability for our country to overcome many hardships should be a source of national pride... instead, the Democrats and their partners in crime in the media, have been trying to talk up a Recession to hang round Bush's neck...that may end up being a tough sell --- earlier today at a church social I heard two (liberal friends) financial - not political - analysts lay the entire subprime fiasco squarely on Bill Clinton's doorstep - more specifically they blamed it on Henry Cisneros (hey if we're blaming...) who during the first Clinton term pushed hard for more housing for "the poor", including much relaxed rules on lending to those who, as is becoming obvious, might have a hard time repaying those loans - of course the lenders jumped at the chance for more business, but without government pressure and charges of "red-lining" or "discrimination" when loans were not readily available, the current mess probably would have never gotten so far out of hand. It use to be that you had to have a healthy down payment and a proven trustworthy credit history before you would qualify for a mortgage. Now even illegals have been getting home and "business" loans, illegals! Note: Though I see a recession as a very real possibility, it's my hope that it will be short-lived. Save when you can, and buy American when you can...not easy, I know.

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Jason January 20, 2008 5:19 pm (Pacific time)

Henry, I should have also mentioned that I do not think that the majority of people who will lose "their" houses have much real equity tied up in them in the first place. The money that will be lost will be investors, large and small, who bought the loans and loan derivative products. I would bet that most of the money flowed from funds that the little guy had no control over. Those who thought that banking stocks were "safe bets" also are being affected. Most people invest in mutual funds and have pensions (like PERS) that are at stake. Luckily, those long-term investors may not be affected immediately.

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Jason January 20, 2008 4:04 pm (Pacific time)

Henry, the one million foreclosure data may apply to those those who, ten years ago, could not have afforded to buy a house in the first place, or at least one much more modest than the prices they ended up having to pay to get into the market during years of completely unsustainable price appreciation. Double digit inflation rates have never been the norm, and years of such increases back-to-back did nothing more than generate higher (ad valorem) tax bases that allowed state and local governments to grow. That growth will further affect the economy and put more weight behind the recession that is overhead. The people who should only have been renting ten years ago need to be renting today. Until they get back into rental situations and out of the housing market, the "bottom of the market" is not going to occur, and we will see people feeling less and less wealthy (from housing stock.) The clouds are going to be dark and gloomy until enough rain has bled the "shadow" banking system behind the easy money that caused a lot of the economic growth that we thought existed. Unfortunately, most of that wealth was transfered to China and other countries rather than remaining in the US, to be available for internal economic growth. Economic growth that was "borrowed" is not going to happen for several years, until there is more oversight in that arena. An additional factor is the underlying banking system that allowed liquidity to flow into areas of negative returns. This system, that uses acronyms like CDO, create financial products that can't easily be valued in the first place, and the use of them has to be restrained. A lot of money is now searching for business investment. But our "controlled" banking system did not maintain a conservative level of oversight and has now had to go to other countries (and their sovereign funds) to tide the flow of funds. They have also had to take massive write-offs and cut dividends to levels not seen in a generation. I hope that the programs at the SBA for military vets might help grow the economy from within. What the US has always done best was allocate capital into profitable entrepreneurial enterprise. Trying to artificially stimulate consumer-based demand that was caused by excess liquidity and low interest rates won't be what saves us. It will have to come from hard working people growing the American small business. Put money behind that goal, and we might see the next generation develop that prosperity that we really haven't seen for at least 10-15 years. And we won't for another 5-10, at the minimum. It will take time for America to grow exports of new services and products. But with the weakened dollar, it is easier now than it has been for a l-o-n-g time. If we "free" up capital in the way of simple tax rebates, that will have a short-term impact. But the prime beneficiary, I think, would be China since we buy something like 80 percent of all our consumer goods from it. WE cannot keep borrowing from other countries' investors in order to fund our country's gluttony of goods that we really don't need, and which aren't investments in the future.

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Henry Ruark January 20, 2008 2:44 pm (Pacific time)

To all: "because we will point them out (think NY Time writers)" Wonder if he includes Irving Kristol, long notorious for leadership of cult, just added to Times by Publisher ? For whatever reason Kristol now ensconced on NYT-pages, NOW this one must be careful how he curses "NY Times writers", and will discover, painfully, that the generalizations used to obscure realities have their own way of trapping the pretender-to-knowledge. How out-of-it can you be, when this is not even known and taken into account here ? Obviously enough to cite "98.1 percent" as paying housemortgage on time, when reality is more than ONE MILLION Americans are now facing foreclosure, most directly as result of the "deregulated" and degenerated low-end real-estate market allowed by Bush-et-al policies and direct actions. Even if this percentage is accurate, wht counts is the huge group losing their major asset and life savings, if the foreclosures are permitted to snatch that from them. That's why all concerned in Bush-cabal now find themselves admitting the consequences of what they've allowed, and also seeking desperatly to cover up and remedy the impacts, in any way possible including huge new federal fundings sure to demand larger bureaucracy to "manage and plan" while also rewarding perpetrators of the real-estate scams to escape, and, indeed, score huge further rewards. "Voodoo economics", Bush I termed roots of this one just before getting purchased by v-p/run, leading in time to his own regime, continuing to promote "supply-side" all the way...with current consequence carried still further by Bish II, strings being pulled by same Cheney/Wolfowitz careful controllers.

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Jason January 20, 2008 2:28 pm (Pacific time)

Jefferson, I respectfully disagree. I think we are heading into recession. Who has $$$ anymore, not the people who felt "real estate rich" and were taking out home equity LOC loans. And, an economy can "appear to grow" nominally, but when inflation is taken out, real growth can be negative. Ultimately, that is what we need to be worried about. inflating the economy is what I think is going to happen, but it may not appear to be "stagnation", which Reagan had to deal with.

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Jason January 20, 2008 2:23 pm (Pacific time)

Neal, could you state, and support, your indication of "economic sophistry that history has already clearly debunked"?

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Jefferson January 20, 2008 1:11 pm (Pacific time)

It's pretty unlikely that we will go into any full bore recession. Actually I'm pretty optimistic for our economy's ability to handle any serious problems because of its high diversity. But, I see food prices moving up very quickly because of the ethanol scam, which is directing animal feed to it's production, rather than what it should be used for. You will be seeing the far left bellowing for more government food subsidies (during this election cycle for political reasons) which will continue to increase until either corn production acreage increases or the scam is properly exposed and current/future corn production is redirected to feed. It's an age old method used by corrupt people, i.e. , control the food supply, you control the population...watch the Charlatans increase their "fear generating" squeaky-wheel bellowing. They will state some obvious facts (probably even use some Founder quotes or something similar) then weave fiction/lies with facts into their misinformation tapestry. They really hate conservatives because we will point them out (think NY Time writers)), then they will come out with their rhetorical "guns a blazing" in an attempt to misdirect your focus. Unless you live in a cloud of "pixie dust" you will easily spot them.

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Vic January 20, 2008 1:03 pm (Pacific time)

Jefferson, even though I almost always am diametrically opposed to your point of view, I have to give you credit for being a good writer and expressing your opinion in a clear and concise manner.

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Neal Feldman January 20, 2008 12:31 pm (Pacific time)

Jefferson - thank you for the classic examples of economic sophistry that history has already clearly debunked. But do keep repeating it... keeps us our toes as to being reminded what policies to avoid like the plague. Ah well...

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Henry Ruark January 20, 2008 12:30 pm (Pacific time)

To all: What's overlooked in any simplified account of growth and taxation is always the other consequences avoided by those who wish to distort the process for their own political ends. The widespread people's revolt which generated the New Deal and sustained it during the period of greatest achievements in our history in social, cultural AND economic developments, leading to the creation of the current "middle class" and to the once-widely/sought "American Dream", is an historic example. Then came the defiance and demand for disembowelling the unions and initiating damaging class-oriented actions and the distorting/perverting policies of the Reaganites and Nixon's nastiest moments in sabotaging still further what had been achieved earlier. Combined, of course, with "empire building" everywheres, and many millions of dead bodies of dissidents, wherever the U.S. supported tyranny, as in Iran-Contra and other historic South and Central American nations struggling to win their own freedoms. We are still desperately trying to work our way out from under those deeply costly damaging situations, with the current cabal and its confused and incompetent measures now still further extending and multiplying, via another "wasting war", what we had begun to remedy. Do you wish still, now, after more than a decade of "supply-side" failures, to see and feel more-of-the-same ? The choice is clearly yours to make, with the obvious consequences sure to follow, AGAIN !! Just buy, again, into the Bush-bwaa, the Cheney-doo/doo, and the WolfowitZ wild, woolly, and witless continuances --for the very same consequences still again.

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Henry Ruark January 20, 2008 12:12 pm (Pacific time)

(Sorry for incomplete comment, so here it is again.) Jason, Neal et al: One more component in rapid approach of national decline is now completely clear, well expressed here: "This is a phenomenon that could be called the growth of state capitalism as opposed to market capitalism. The United States has not ever been on the receiving end of this before." JEFFREY E. GARTEN of Yale School of Management, on the purchase of American companies by investment funds controlled by foreign governments.

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Jefferson January 20, 2008 9:51 am (Pacific time)

By definition, an economy grows when it produces more goods and services than it did the year before. In 2007, Americans produced $13 trillion worth of goods and services, up 3 percent over 2006. Economic growth requires four main factors: (1) an educated, trained, and motivated workforce; (2) sufficient levels of capital equipment and technology; (3) a solid infrastructure; and (4) a legal system and rule of law sufficient to enforce contracts and contain a functioning price system. High tax rates reduce economic growth, because they make it less profitable to work, save, and invest. This translates into less work, saving, investment, and capital--and ultimately fewer goods and services. Reducing marginal income tax rates has been shown to motivate people to work more. Lower corporate and investment taxes encourage the savings and investment vital to producing more and better plants, equipment, and technology. It may be technically correct to say that tax rate reductions (long term) are more stimulating than rebates (short term) but the reality is that rebates stimulate the economy faster than the rate cuts (though this is really not very effective and is essentially a political move, but it may help in developing a bi-partisan political environment that will help develop more viable solutions ) . The good news about the way things are going is that there will be some sort of plan to return money to the taxpayers to stimulate the economy. That's much better than the Democratic scheme of stimulating the economy by more direct government spending programs. For example I heard that Hillary wants to provide Government subsidies for "Green Collar" jobs to develop renewable energy projects. Even if this was a good investment by Government, it's a loser from the objective of an economic stimulus. Any development would involve a relatively small number of people and would take years to bring products to market. Then the products would cost more than what consumers are spending now. It may turn out to have been a good long term investment 10-20 years from now but it's a negative as a short turn stimulus.

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Henry Ruark January 20, 2008 5:58 am (Pacific time)

Jason, Neal et al: One more component in rapid approach of national decline is now completely clear, well expressed here:

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Vic January 20, 2008 8:21 am (Pacific time)

I hope you are right, Neal, about the majority rising up and cleaning house...unfortunately Americans are so damned apathetic, things would probably have to get pretty bad before anyone would leave their comfort zone. I honestly think some kind of mass revolt is about our only hope for change.

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Jason January 20, 2008 1:41 am (Pacific time)

Neal, actually I was happy to see Reagan give the country some leadership that it desperately needed. We ended the 1970s with out of control inflation and the oil crisis. interest rates (10-year Treasury) were in the double digits. One could blame either party for the problems, but Carter wasn't the type of leader the country needed. Like I said, the stock market was depressed throughout the entire decade, and it was Reagan's policies that finally got everything under control. The problem was that no one stopped the excessive government spending. Both parties are to blame. it is not a "neocon" issue. All Congresses, controlled by both parties, have neglected the matter. We are going to feel the pain. Those "with" are going to have a lot less, and those "without" ain't going to get anything more. Education is the only way for anybody to get ahead. Luckily I was told this in the 70s, and I was able to benefit from military college benefits. I just hope that people don't expect their investments to perform as many economic texts still talk about the returns over the past 90 years being 10.5% per year. We aren't going to see those rates in the next decade or two, unless we have run-away inflation, which could actually give negative real returns. This would be an excellent topic for one of your reporters, as it is not discussed in the open. Maybe that is because nobody really cares?

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Neal Feldman January 19, 2008 8:27 pm (Pacific time)

Jason - Nice to see someone understand that a spiraling national debt and borrow and spend policies cannot be maintained... it is just borrowing from peter to pay paul until peter says no and paul come collecting then what? Neocons look at Reagan as some kind of God who took us from a malaise of being hit with quadrupling gas prices overnight and gave what seemed like prosperity... I say seeme because it was all illusion - smoke and mirrors. Anyone cam make their lifestyle better by racking up $4 trillion in debt. But as all credible analysis has shown this has only destroyed the middle class, destroyed the concept of the single income household into a paradigm where both spouses feel they need to work (sometimes more than even one job each) just to make ends meet leaving no one, or strangers, to raise the kids. I am concerned that we have only begun to see the tip of the iceberg of social problems coming upon us soon... it would honestly not surprise me in the least to see the 90% rise up against the 10% ala a modern re-enactment of the French Revolution when the huge majority get 'mad as hell' and decide they are not going to take it anymore. When they are sick and tired of seeing their jobs get outsourced to Indonesia so some fatcat CEO can get a $200 million bonus check. People will only take this kind of crap so long and once that dam of rage bursts it is not going to be a fun time for the rich, I'll tell you that. There will be a decade or two of chaos before things reassert... hopefully such can be avoided but that will never be avoided so long as neocon tax policies are perpetuated. It is quite clear. Those who refuse to learn the lessons of history are doomed to repeat them. Ah well...

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Henry Ruark January 19, 2008 2:33 pm (Pacific time)

Jason, Neal, et al: Appreciate your clear view of realities we all must face, and also tone of dialog exchange to assist each other in deeper understandings. Re your points, every one traces directly again to the "supply-side" fallacy, clearly at heart of most extensive Reagan-caused damages to our democracy, now coming to the surface after long suppression via nearly every channel. You may not know that "s-s" was in part created since it makes possible the ostensible reliance on "trickle down", on "privatization", on damaging "deregulation", on ostensible "free trade", all supplied in part and strongly supported by Grover Norquist, who is notorious for his "drag government into the bathtub and drown it", and also for his other actions helping to set up and motivate "offshore" movement of many good, strong jobs then in operation via union action with major U.S. corporations. Latter was direct-drive for union-busting operations from early days of the Reagan gang, even prior to candidacy, tied to "Bulwarism", far-right economics from PR-chief of GE, which was Reagan's school for shift from "liberal" and 'Union leader" to waterboy for corporate interests, first motivated by building acting career via GE tv-show AND by years of travel to appear at many GE plants for their PR purposes with workers to inculcate Bulwarism approach. Documentation available on request and ID to editor; and please note authors involved NOT "socialists",NOT in any way "commie-symps" --and most definitely NOT "girly-boys" !

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Anonymous January 19, 2008 2:31 pm (Pacific time)

Hillary: She was for Reagan before she was against him…and so was John Edwards. Barack Obama is getting slammed by both Clintons for positive comments he made about Ronald Reagan and the GOP. Hill chastised Obama for saying “that he thought the Republicans had better ideas than Democrats the last 10 to 15 years.” Mr. Purple Fits said his “legs fell out” when he heard about Obama’s remarks. Wait until Billy Boy reads Hill’s own campaign website. On Dec. 12, 2007, the campaign touted an editorial endorsement from a New Hampshire newspaper chain, which mentioned that Hill had cited Ronald Reagan and George H.W. Bush among her “favorite presidents:” Yes I think that at times, democrats can express some honest opinions. Way to go Hillary and Obama! Hey, I'm just the messenger...

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Jefferson January 19, 2008 2:02 pm (Pacific time)

I see that no one has provided some "fabricated post" by me that said Paul Krugman was my favorite economist. Shock? People how many of you are familiar with "Rubinomics?" This term is named after Clinton Sec. Of Treasury Robert Rubin. "Rubinomics" is the means democrats take credit for the budget surpluses and economic growth of the late 1990's. It was the GOP congress that provided for fiscal balance during this time period. The Clinton Administration simply followed the Republican fiscal policies and Clinton signed their legislative bills and we all were better off for it. For example, look at our current interest rates and our historically low unemployment rates and compare it to the Carter Administration when the democrats controlled congress. Regarding Paul Krugman, an unabashed liberal who has never ran a business or made a payroll, but someone who comes out of academia and whose whole spiel is predicated on theory(s), who is not really very good at what he does, whatever that really is. If you were a business investor, would you want an experienced individual looking after your investment, or say someone whose only knowledge of running a business was based on theory or writing articles on it? Mr. Krugman writes for the NY Times (a paper that caused considerable harm to our military in a front page article recently 1/13/08) that was riddled with inaccurate information, that I will address later. Krugman and the Times appear not to worry about facts getting in the way. For example Krugman claims that Vice President Cheney's energy task force misdiagnosed the California crisis, while "yes, I am patting myself on the back for getting it right." But when, exactly, was Krugman "getting it right"? When he was paid $50 thousand to be a member of the Enron Advisory Board? When he was writing glowing puff-pieces on Enron for Fortune magazine? Or when he was accusing the Bush administration of "crony capitalism" for its involvement with Enron, without admitting his own involvement? Does he really think that by not mentioning the name Enron in a column about energy market manipulation that no one will remember any of that? Yes I and most people familiar with Paul Krugman are very skeptical about his assessments...

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Jason January 19, 2008 12:54 pm (Pacific time)

Note to Editor, the prior comment should have said "TAX AND SPEND". Sorry.

Editor to Jason: I would put it where you want it but I'm not sure, so I just approved this, thanks.

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Jason January 19, 2008 12:52 pm (Pacific time)

Oh, and re: the stock market, there was a period from about 1967 through 1982 that the SandP 500 did not gain any overall appreciation. We are just passing the decade mark for it to happen again (depending on how severe the current "correction" is.) Of course, 40 years ago, stocks actually paid a dividend, today they barely yield anything tangible. I bet we will not see a permanent share price gain for another five years or so. And the stock market will barely return 5 or six percent per annum for the next decade or two. Mark my words.

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Jason January 19, 2008 12:47 pm (Pacific time)

Neal, your focus on the debt should be the prime topic for the national elections. The fact is, we are about $10 trillion and are able to carry it at around 3.5 percent per annum. Inflation IS REARING up, which will increase interest. Maybe not today, but soon. By 2010, I estimate that interest on government T's will be at least 150 to 200 basis points higher than today (1.5-2.0%) meaning, all else equal, we will be paying an additional couple hundred BILLION dollars in interest payments. This does not count the additional trillion that the debt will rise by then. We have no end in sight for this menace. If we inflate the economy, it will only help the rich (and debt-holders) that much more (they will be paying back debt with inflated earnings and lower real principal.) The government cannot maintain a strong economy AND limit inflation...at least not THIS time around. And if it thinks it can continue to AX AND SPEND, then I fear the true impact on interest rates may be another 100 or 200 basis points (1.0%-2.0%) higher than what I mentioned above. Anyway we look at it, it's going to mean higher taxes for us all.

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Henry Ruark January 19, 2008 11:20 am (Pacific time)

Jason et al: Reagan myth continues to explode - so "see with own eyes" Parry report dated today, sampled below simply to document previous note and to provide you with "use own brain" material on this one, too. Here it is, from reporter unchallengable as "socialist", communistic", or "girly boy",with published record as good or stronger than anyone else in the profession: consortiumnews.com Obama's Dubious Praise for Reagan By Robert Parry January 19, 2008 "Sen. Barack Obama prides himself in transcending the old ideological chasms that have divided the American electorate for decades, so much so that he recently cited Republican icon Ronald Reagan as a leader who “changed the trajectory of America.” "Though Obama’s chief point was that Reagan in 1980 “put us on a fundamentally different path” – which may be historically undeniable – the Democratic presidential candidate went further, justifying Reagan's course correction because of “all the excesses of the 1960s and 1970s, and government had grown and grown, but there wasn’t much sense of accountability.” "While Obama later clarified his point to say he didn't mean to endorse Reagan's conservative policies, the Illinois senator seemed to suggest that Reagan's 1980 election administered a needed dose of accountability to the U.S. government. In reality, however, accountability wasn’t part of Reagan’s medicine for America. Indeed, one could say the opposite. "On the domestic side, Reagan oversaw the dismantling of regulatory structures that restrained the excesses of Wall Street investment banks, the energy industry and other economic powerhouses. Many of today’s problems – from the mortgage meltdown to the nation’s wasteful energy policies – can be traced to Reagan’s contempt for that type of accountability. "Meanwhile, regarding Reagan’s approach to the world, the documentary record reveals a foreign policy that was one of the most brutal, most corrupt and least accountable in American history." Rest details why, in horrendous detail over six more full pages. SO one must question and demand explanation from any who now still use myth for propaganda purposes to support cult/cabal now known for continued depredation, damage and deepening discord for our entire remaining democracy.

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Henry Ruark January 19, 2008 8:06 am (Pacific time)

Jason et al: "See with own eyes" re the reality of "voodoo economics", Bush I re "supply-side" before he "settled" as Reagan V/P. Note lead counts NY Times as major authoritative source despite "failing"-status now attributed to it for obvious political-propaganda reasons. That daily still leads world for basic, reliable reporting. Here's start; much more in detail at website Alternet: "AlterNet The Fraud of Bushenomics: They’re Looting the Country By Larry Beinhart, AlterNet Posted on January 19, 2008, http://www.alternet.org/story/74262/ The New York Times made it official. The Economy is a problem! So, now, at last we can discuss it. Not just discuss it, in rapid order "recession" became the word of the day, from White House, Congress, the Fed and the media. It's blamed, mostly, on the subprime crisis. But that's not the problem. It's a symptom. It is the logical, and probably one of the necessary results, of Bushenomics. Along with low, or no, job growth. Little or no business growth. Depressed wages. And the crashing dollar. (The president has a different vision of the economy. In his vision it's booming! And the number of jobs is growing! Though there is this little blip.) The idea under which Bushenomics was sold is this: * The rich are the investor class. * If the rich have more money, they will invest more. * Their investments will create more business. * Those businesses will create more wealth, thus improving everyone's lives and making the nation stronger. They will also create new and better jobs. Whether or not the people who say such things truly believe them, I cannot say. But that's their pitch, and the media certainly seems to buy it, as do most of the establishment economists. A more realistic -- and less idealistic -- view of Bushenomics is that the Bush administration and its cronies came at the economy with the attitude of oilmen. * They inherited a vastly wealth country. * They looked at it like the oil under the Alaskan wilderness. They craved to pump it out, turn it into cash and grab as much of that cash as possible. Wherever possible, they literally sold off the assets. This was called privatization. Our biggest asset -- in terms of size -- is, of course, our defense establishment. With privatization, one dollar out of every three for direct military operations in Iraq and Afghanistan goes to private contractors like Halliburton and Blackwater. So when someone says, "Support the troops!" with budget appropriations, they should really yell, "Two-thirds support to the troops! One third support to Halliburton, et al.!" -------- SO Commenteers re quarreling with solid international source when they try to defend "supply-side", with full public record revealing the realities truly involved.

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Henry Ruark January 19, 2008 5:54 am (Pacific time)

Jason: Your kind comment understood and appreciated. Emphasis on spotlighting tree continues to make sure man with mask and malign intentions wellknown to all. Will lighten up now that we have nailed down purposeful attack-elements designed to damage and deny both space and time-attention here to real issues. Thank you for patience, same as needed in other areas of our society; It took eight years for us to partially recover from planned assault by "noise machine", formerly GOP-weapon. (Please note I did not AGAIN repeat n..... !) Friendly opposing points of view always welcome here; that is why I've written Op Eds --with a byline, please note ! for several years here, hoping to share, but mostly to LEARN from others via their life experience, often much broader and more relevant to any one issue than mine own admittedly "checkered career". Keep firing from your own learning life-experience and share ID so we know from whence you cometh and what the background MEANS in what you bring to us all here.

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Neal Feldman January 19, 2008 2:00 am (Pacific time)

Jefferson - Tax cuts primarily (again) for the rich... the middle class will get crumbs at best and the poor won't get squat as usual. If your ideas on taxation and revenue were correct then zeroing out all taxation would result in infinite revenue. Odd how it just won't work that way in reality. 50s and 60s were the Golden Age of the US.. and guess what.... marginal tax rates of 90+%. Today marginal tax rates of 35% and the infrastructure is falling apart, the rich get richer and everyone else just gets screwed, the middle class is vanishing and the national debt is passing Rigel about now. Oh so much better, eh? Trickle down policies are the most failed idea after Prohibition. Ah well...

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Neal Feldman January 19, 2008 1:56 am (Pacific time)

Jefferson - Reagan changed the trajectory of the US all right. From 800 million dollar national debt from 1776 to 1980 to almost ten TRILLION dollar national debt in 2008. Decimation of the middle class. The rise of the robber barons of the 80s (corporate raiders) who robbed the pensions earned by millions od retirees. Great work Ron. Clearly the Alzheimer's kicked in a bit late for the country's benefit. Ah well...

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Jason January 18, 2008 11:56 pm (Pacific time)

Excellent posts on this topic, and not one really negative comment. Good work, Tim! But...Henry, with all due respect, your constant focus on "hiding behind the tree" is getting old. Could you please drop the issue? Your focus is not going to get what you are seeking.

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Henry Ruark January 18, 2008 5:52 pm (Pacific time)

To all: Obama's quote covered how people felt then, NOT what Reagan proceeded to do at once and later, as the media made quite clear in later coverage. Re rest, same old blather and smather we've heard for years, reflecting very badly re realities today as ordinary people are experiencing them. Have you checked food, gas, power/heat/light and other essential costs lately ? That's inflation, built-in consequence of "supply-side", as public records for many past years will disclose. Note, too, absolutely no answer to any one my nail-down questions re 12 MILLION immigrants,here whether we like it or not and regardless of whom one can blame for the border negligence involved; and including "hide behind tree" easy-solution via simple documentation to Tim, also carefully and completely avoided. What's the problem, sir ? Did yur bosses refuse you permission ? Re Krugman-as-shill, look who is calling who nasty names --and level from which that defamation cometh. It is K. who has both the worldwide reputation and published record, with byline, too, since he doth not need to hide his competence, credibility or credentials. Re NY Times "failing", that will be the day the sun comes up in reverse. Have you warned the publisher ? Remember to short the stock, too -never miss a dollar-shot like that ! Same direction, of course, that neocons wish to move now, as always...back to "the old days", and if possible all the way back to feudalism and control of all in the village by the Lord up on "the Hill" where "the Castle" crowns it all, in due deference to supposed "royalty". Can't you sense that, in what you "see here with own eyes" ?? We know better, here in the USA, having learned the hard way ever since the Revolution.

This is an example of a post that stays with a subject and you know what, I don't have a problem with people lambasting the politicians and the newsmakers, that is not inter-personal. Thanks Hank.

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Jefferson January 18, 2008 4:22 pm (Pacific time)

Krugman is a legend in his own mind. I would like someone to produce a post where I said that pinhead was a favorite economist ( not an economist anyway!) of mine? Will not happen. Note: He is a lefty shill, who writes for the failing NY Times. It's unfortunate when people feel they must fabricate statements by others, is their argument that weak? For some, most certainly. I would not be surprised that by the time congress issues a rebate, if they do , the crisis will be over. As many of you know government moves very slowly. With regards to how bad this recession will become is anyone's guess, for "real" economic professionals from all different perspectives have no idea. But our economy is quite diverse, so what happened in 1929 (Note: Some economists feel that some New Deal policies slowed our recovery back in the 1930's) or say 1987, we will not suffer as a whole nation as badly as we did in the past. Probably the best solution to this economic rough patch would be to make the tax cuts permanent as well as capital gain tax rates should be permanently reduced, or simply eliminate all taxes on capital gains, including personal savings, e.g. bonds, etc....why pay more taxes on hard-earned money that was already over-taxed!. If you are an investor, you want to know that your long term investment will not have to deal with increased taxes down the line, otherwise you will not invest. The left does know this people, but for them to get the control they want, it means to get you down on your knees in fear. Ignore their vacuous meaningless bellowing. If you recall, it was Clinton's tax increases in 1993 that allowed the Republicans to gain congressional control, and then all Clinton did was sign the bills the congress gave him, so he got the kudos for simply doing the right thing by following what the American public wanted him to do via the Republican congress (the conservatives were in charged then, need to get them back in power!)...don't worry people, this will be resolved in the not too distant future, unless you get a democratic president (will never happen, never). As the song says: "Don't worry, be happy." Don't let the fearmongers get to you...remember the CRY WOLF story, well thats what their strategy is, nothing more... Note: In a recent interview with the Reno Gazette-Journal, Obama said that "PRESIDENT REAGAN changed the trajectory of America,” and said Americans “want clarity, we want optimism, we want a return to that sense of dynamism and entrepreneurship.” People at least Obama understands how great Reagan was for America!

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Henry Ruark January 18, 2008 2:42 pm (Pacific time)

To all: Would NOT want to be "verbose", so here it is in the real Jefferson's real words: "It is reasonable that every one who asks justice should do justice" -- Thomas Jefferson =

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Henry Ruark January 18, 2008 1:42 pm (Pacific time)

To all: MUST also point out, for N-N further guidance on all those queries on any possible immigration solution as he will DO IT,that any course he chooses will force, first, further extension of government he declares is oversize NOW --and in addition cannot help but add immeasurably to deficits already at historic levels. Could this situation somehow tie tightly to "wasting wars" ongoing in Afghanistan and in Iraq ? SOMEhow seems pertinent given continuing threat of new one in Iran, don't you agree ? THEN perhaps that reality also shines strong light right back on true-and-honest status for education, healthcare, economic assistance, childcare, social-issue advances of all kinds, et al, et al, et al --don't you agree, again, on that obvious reality, NOW, in this nation ? All of that came from and much was initiated via the widespread application of "supply-side" economic policy starting with Reagan and driven onwards ever since by strong neocon propensities, despite commonsense issue and problem advice from all others involved. "Wasting war" has decimated U.S. growth in past periods, too --but never at this level and never for this continued devastation, now coming to full consequences, for all to see, feel, and "enjoy" !!

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Henry Ruark January 18, 2008 1:25 pm (Pacific time)

To all: Easy to talk about economic realities, but when faced with action-demands it comes down to "supply-side" vs "Keynesian General Theory". We already know what "supply-side" does, since we suffer from it every day, in ev ery way, since Reagan bought that bent paper-napkin. For what Keynes' approach did for years, aiding the New Deal to reconstitute our nation, see Wikipedia for simplified summary anyone can understand, from own daily life experience. Re "illegal aliens" approach to 12 MILLION now here, most arriving via overstaying a legal visa, does N-N have solution to uproot, move, "send home" ALL TWELVE MILLION many of whom are now very important workers for many small and large businesses ? Does he contemplate the huge demands on bigger government, the concentration camps, the human miseries, the worldwide very damaging images of our nation as an operating democracy ? Just what does he have in mind ? Waterboarding won't help much here; pain will not drive them away, unless fatal --and what do you do with 12 MILLION DEAD BODIES ? SO, N-N, what do you propose as workable, cost-effective, small-government, sure to work reduced-bureaucracy, fewer armed interventionists, and thus workable in your terms, methods for removing these 12 MILLION ? Set aside whether right or not for them to be here, and deal with reality of what can be done: They are HERE, and you et all propose to dislodge and export them --SOMEwheres, SOMEhow, to SOMEplace else. HOW will YOU do it ? Obviously, YOU cannot - only government can DO IT. Do we really want our nation to have that, too, on its conscience, down the rest of the ages ? What consequence will that have on our long-vaunted reputation as "The land of the Free and the Brave ?" Meanwhile, have you agreed with Tim for review of your fraudulent claim for "hiding behind the tree" ? Surely if there IS any validity to it, you can CONFIDENTIALLY entrust it to Tim, who can then relay his judgment, based on your documentation and his contacts with your command-structure. We await this eminently fair and open procedure, sir...if not acceptable that surely moves far towards proof of attempted fraud on your part. Remember, "retaliation", ostensibly against others, was your overwhelming fear (you wrote) preventing now-standard action of ID-on-request, in many other open channels in the nation. Your continued disregard and obvious contempt for this channel and all participants is all too clear already --but your refusal to respond to this obviously clean, clear and fair proposal is strong proof, sir, of contempt supreme for all here. Go try to sign into many, and see what they demand now.

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Henry Ruark January 18, 2008 11:32 am (Pacific time)

To all: Still more over-simplified Reagan-era neocon s...(stuff !)from u-know-who. From "behind tree", he tries to out-fire Krugman, world famed working economist, whom N-N once stated was a favorite of his. NOW he will deny, of course; what other course does he still have ? We've had working sample from his cult/cabal now for nearly thirty years, almost all downwards...which suggests that significant curve on napkin, drawn by Laffer, may well have been upside-down. His name REALLY IS "Laffer", but that's far from funny now, since curve surely IS --FUNNY, that is. Re who creates wealth, and "trickle down", YOU've lived through same 30-years...do you believe that crap any longer ? Re who creates wealth, canny old Ben Franklin put it wisely and well, when he declared the state could rightly take credit for "private property" since that is the only power to enforce that right. Will seek out precise quote, hidden here somewheres in pile after pile of files culled before discard. Meanwhile don't buy another pig, this time not even in a poke, from this would-be pundit, properly and now thoroughly discredited by actual realities in the world he cannot join with us, since self-seduction sequesters him 'way-back-when Reagan sold out to GE over those prior years before he got to play the role of "President", carefully guided by such as Cheney and Bush I and Wolfowitz, et al. Go "see with own eyes" at any of several hundred Internet sources --not ALL of which can be "socialist" or "commie-influenced" OR even "leftish", although those outmoded designations mean nothing in today's realistic world driven by trends beyond any national control. "See with own eyes" which, and how many, and why, nearly the entire economic and financial world is now clearly aware that recession is here, and that neocon non-working control-methods may well make it one of worst...so N-N is now quarreling with many more than just Krugman, including even Bush and cohorts, forced to admit reality and seek succor from same Congress they have been deluding and atttacking ever since Reagan. "Capitalism is the astounding belief that the most wickedest of men will do the most wickedest of things for the greatest good of everyone." -John Maynard Keynes, British economist He was, despite claim sure to come, NOT "a socialist", any more than Margaret Thatcher, famed for economic royalism, was. But he sure knew and could teach economics, as world learned through decades of successful management prior to arrival of neocon debacles. Best test: Rapidly rising inflation, driving food and all other costs beyond reach of millions-more each day and week. Seek direct word from friends, neighbors, colleagues and any others you can get to talk with you freely. Share what you learn right here in this honest, open, democratic dialog channel, now under continuing attack by N-N et al for their own malign political purposes, while they sit safely on pile of pelf protecting them from the vicissitudes us ordinary folk must now face, worse every day...

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Jefferson January 18, 2008 8:32 am (Pacific time)

Massive tax cuts and rebates will be made to stimulate the economy. For you people who really don't pay any taxes (you know who you are!), this will not apply, but people who run businesses (big and small) will want this type of stimulis. The far left loons (who generally have no background in economics[even on a micro-level]) will call for more taxes on the rich, or whatever. Yeah that makes a lot of sense, dry up the money investor's use to maintain, even create jobs. Also by enforcing illegal immigration laws would no doubt have a positive impact on wages. For example, the culinary union in Las Vegas has been reported to be made up of 50% illegals...now that's a pretty good reflection on how unions really care about our laws! This union type of behavior is a nationwide practice. Furthermore, some financial experts (not lefty loons that are clueless!), feel the subprime meltdown is not indicative of a larger systemic risk that requires government intervention. Subprime mortgages comprise a small subsection of the mortgage market, and even within that subset, the majority of loans are being paid on time. Foreclosures and defaults have increased, and loans with a 2006 vintage are particularly problematic. Estimates suggest that turbulence could continue through 2008 and the crisis could ultimately cost more than $300 billion. However, nationwide, the delinquency rates were just over 5 percent in the second quarter of 2007, a small portion of the mortgage market. Even riskier sub-prime loans, which comprise roughly 18 percent of the overall mortgage market, only had default rates of about 15 percent. This means that about 85 percent of even the sub-prime market is making payments on time. Much of the problem lies in a handful of states, such as Florida, Arizona, and Nevada, where speculation in the housing market is responsible for many of the mortgages at risk.

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Henry Ruark January 18, 2008 8:03 am (Pacific time)

To all: NY Times' Krugman is among the most respected pundits now pondering what when so badly wrong in the combined and ostensibly "sophisticated" housing-and-credit bubble now bursting in the faces of so many also-"sophisticated" investors: "...U.S. financial markets, it turns out, were characterized less by sophistication than sophistry, which my dictionary defines as 'a deliberately invalid argument displaying ingenuity in reasoning in the hope of deceiving someone." (See NYT website today !) WHY does that sound SO FAMILIAR right here in this channel ? Could it be because of comprehensive display of precisely that approach, as in the "98.1%" statement by N-N re mortgage payments, while big-city and every-state officials are scared s...less about continuing property and other tax receipts, now deep in rapidly growing uncertainty due to burst-bubble ????

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Vic January 18, 2008 6:50 am (Pacific time)

Maybe it is Karma. I hope any nation that goes around the world threatening, bullying, murdering, stealing, raping and bombing and squandering the world's resources ends up with third world status, having to beg for basics from the world it used to look down on. I remember back in grade school there was a kid who was not very smart, but he was big and could beat any of us up. He bullied all of us for years, but soon found himself shunned. No one talked to him, no one invited him to birthday parties, everyone hated him. In high school, he tried to make amends, but to no avail, as all of us could remember being humiliated or hurt by him many years previous.He became a drunk, then a tweaker, then died of a heart attack at 55. He blamed everyone else for his problems too, I might add. I'd say he is a good example of the US government. I love this country and the people, but we have gotten lazy and soft and allowed our country to be stolen out from under us.

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Henry Ruark January 18, 2008 5:55 am (Pacific time)

Hey, kids ? "Not to worry" --remember, we've been told that "98.1%" of all American mortgagers paying on home-loans "paid on time". (See N-N Comment, citing distorted numbers purposely.) Thus the absolute collapse of the major finance agencies and banks involved in the low-end home-loan racket "need not worry us at all, since surely everything gonna be all right", with neocons in charge for last 30 years. That's of course why China and India have now injected nearly $100 billion in new money into U.S. financial veins simply to postpone coming catastrophic collapse, now so fundamentally obvious that even Bush acknowledges truth of news reports that "recession already here" --as authorities around world are now confirming. Do you prefer Chinese OR Indian tea ? Important since soon you must drink one or t'other since they will own --and demand full management of--most of U.S. assets, when they finally decide to cash us in. But "injecting liquidity" will do very little since it is "the underlying assets, not only in housing but other markets deeply affected by that debacle", that are now under extreme pressure...as this story indicates. (Quote from NYTimes analyst.) Money-supply NOT really the issue this time, but is now the only weapon still in hand for such as Bernanke, stuck with crisis-builder from the previous neocon conformist preceding him. Check last several Op Eds, re corporate and general U.S. economic situations, for full details on consequences we must now face head-on, while there is still ver-short time left for solid remediation.

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Neal Feldman January 17, 2008 9:38 pm (Pacific time)

And did not even come home with an anatomically correct doll like Quayle did from that rip to Mexico or wherever LOL. Ah well...

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Glen January 17, 2008 6:52 pm (Pacific time)

Scandal and incompetence. Some people just can't do anything right. At least Nixon went to China.

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Neal Feldman January 17, 2008 6:02 pm (Pacific time)

Yup, Shrub's borrow and spend kill the middle class and lavish the rich policies are just working so fabulously! Trickle down should have been flushed long ago. Ah well...

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